BRICS leaders create emergency reserve fund, development bank

Brazilian President Dilma Rousseff delivers a speech during the 6th BRICS summit in Fortaleza.

The leaders of the group of five BRICS emerging market countries signed today a deal to create a new development bank and an emergency reserve fund, Brazil's President Dilma Rousseff announced at a summit of the group in the Brazilian city of Fortaleza.

The BRICS group consists of Brazil, Russia, India, China and South Africa.

Economy ministers of the member nations signed the founding treaty for the New Development Bank and the Contingency Reserve Agreement. The bank will be set up with an initial investment of 50 billion dollars, with the five BRICS putting in 10 billion dollars each.

The reserve fund, meanwhile, will initially contain 100bn dollars. China will contribute US$41bn, with Brazil, Russia and India adding a further US$18bn each and South Africa giving $US5bn.

Rousseff today received personally her fellow presidents from the Bloc: Russian leader Vladimir Putin; the Chinese president, Xi Jinping, South Africa's Jacob Zuma and the Indian prime minister, Narendra Modi. The Brazilian head of state affirmed that the BRICS' new financial institutions "will benefit emerging and developing nations."

Rousseff added that the agreement to make the five countries' international reserves available in times of crisis would help to reduce the volatility experienced by many emerging economies. "It will be a type of safety net for the BRICS," she explained before entering today's meeting.

Trade and Industry minister Mauro Borges also praised the new initiative for co-operation. "The new development back is key to encourage growth in the BRICS countries," the politician asserted.